Getting a personal loan isn’t hard if you have good or better credit and a steady income; getting a personal loan with even a fair credit score isn’t off the table, though you’ll likely pay higher rates and fees and get approved to borrow a smaller amount.
That said, it isn’t always easy to get a personal loan. If you have a poor credit score, limited income, and high outstanding debts, many lenders may reject your application. Below, we’ll review your chances of getting a personal loan based on your credit score. We’ll then show you how to improve your approval odds and what to do if you’ve been rejected.
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Is it hard to get a personal loan with fair or bad credit?
Lenders use several data points when deciding whether to approve you for a personal loan, but your credit score and income are two important factors. While it’s easy to get a personal loan with good or better credit and stable income, you’ll face more challenges with a lower score or income.
Rather than relying on income, some lenders allow collateral based on assets.
The table below shows some of the best personal loan lenders and their credit score requirements.
You can use online loan marketplaces, such as Credible and LendingTree, to prequalify with multiple lenders in one place.
How hard is it to get a personal loan by credit score?
While many of the lenders look at far more than just your credit score to make a decision, especially lenders that cater to borrowers with bad credit, the table below gives a high-level look at your approval odds:
| Credit score range | Easy to get a personal loan? | Details |
|---|---|---|
| Exceptional (800+) | Extremely easy | You’ll get the best rates and lowest fees |
| Very good (740 – 799) | Very easy | You should get approved for high loan amounts at good rates |
| Good (670 – 739) | Easy | You may not get the best rates and terms, but you’ll have no trouble qualifying |
| Fair (580 – 669) | Hard | Your list of eligible lenders is more limited, and you’ll pay high fees and rates |
| Poor (<580) | Nearly impossible | You may only get approved with highly specific lenders, at exorbitant rates, and perhaps only with collateral (secured loan) or a cosigner |
Why can’t I get a personal loan?
Each lender has a unique underwriting process for determining whether you qualify for a personal loan. But if you keep getting rejected when applying for personal loans, it’s likely for one of these core reasons:
- Poor or fair credit score
- Low or unstable income
- High debt-to-income ratio
If you can’t get approved for a personal loan (and sometimes even if you can!), a 0% balance transfer card is always my first choice. For a nominal fee (3% to 5%), you can allow yourself more time to get your finances in order and make the minimum payments as needed until the 0% balance matures.
Just be prepared to pay it off in full by the end of the 0% term, or use the strategy again. Secured loans or lines of credit are also great alternatives, given the lower cost and interest rates.
Poor or fair credit score
This is the big reason you might struggle to get a personal loan. As we’ve seen above, lenders have strict minimum credit score requirements for approval. While we’ve found some lenders offering the best personal loans for fair credit, things get much dicier when your score drops below 580.
A credit score of 580 signals to lenders that you have a history of missed payments, defaulted loans, and potentially even bankruptcies. Lending to you, especially without collateral, is risky.
My first recommendation is to clean up your credit score. Pay off debts or decrease your utilization rate. There are many ways to quickly improve your credit score by paying close attention to your finances.
What to do
While there are ways to get a personal loan with fair or even poor credit (we’ll explore those next), you’ll have more options (and at lower rates and fees) if you focus on improving your credit score before getting a personal loan. If you can wait, here’s how to improve your credit score in as few as three months.
Low or unstable income
You could have the highest credit score possible, but if you don’t have enough recurring income to demonstrate your ability to make your monthly loan payment, lenders may hesitate to give you a personal loan.
What to do
The easiest solution, of course, is to make more money. (If only it were that easy!) Short of asking for a raise, getting a second job, or starting a side hustle, the best path forward is to make sure the lender has a complete view of your income, beyond just your salary.
Don’t forget to report:
- Government benefits
- Spouse’s income
- Ongoing 1099 income from recurring contract work
High debt-to-income ratio
Lenders also analyze your debt-to-income ratio (DTI) when deciding whether to approve your loan. This refers to what percentage of your monthly income is tied to ongoing debts, such as:
- Mortgage or rent
- Car loan
- Student loans
- Credit card payments
- Other loans, such as personal loans or home equity loans
Commonly, lenders want to see a DTI of no more than 36%, though some may be OK with 43% or less. That means only a little more than a third of your take-home pay should go to outstanding debts.
If you’re spread thinner by current debts, lenders may hesitate to grant you another loan because there’s a higher likelihood you’ll default.
What to do
If you can wait to get a personal loan, spend a few months paying down your existing debts, especially credit card debt. The lower your credit card bill, the lower your DTI becomes.
3 ways to improve your chances of getting a personal loan
If you have poor credit and a low income, you’ll have a hard time getting a personal loan, but it’s not impossible. Here are a few ways to make getting a personal loan easier:
1. Get a secured loan
You’ll have an easier time getting approved (and at a lower rate) if you back up your personal loan with collateral, such as your car or expensive jewelry. Secured loans pose less risk to the lender since they can repossess your collateral if you fall behind on payments.
2. Apply with a co-borrower
Some lenders allow you to add a second borrower to your personal loan application. If they have a stronger credit score and higher income, you’ll improve your approval odds.
This co-borrower has equal access to the funds and equal responsibility for repaying the loan; because of the risk involved, the ideal co-borrower is a spouse or parent. Here are some of the best joint personal loans available.
3. Choose a shorter loan term or smaller loan amount
If you have fair credit and are struggling to get approved, try tweaking your requested loan term or amount to see whether it makes a difference. Smaller loan amounts and shorter repayment terms pose less risk to lenders, so you might have a better chance of getting approved.
Can’t get approved for a personal loan? Consider these alternatives
If you’ve been denied for a personal loan, you still have options. Some are safer than others, so it’s important to weigh the risks carefully before moving forward.
Payday alternative loans
We do not ever recommend payday loans, which can be predatory in nature, per the Consumer Financial Protection Bureau (CFPB). But credit unions offer a much safer alternative (albeit with a highly uninspired name): payday alternative loans (PALs).
There are two types of PALs (whose names are also uninspired): PALs I and PALs II. Both are small, short-term loans offered to credit union members with annual percentage rates (APRs) capped at 28%.
| PALs I | PALs II | |
|---|---|---|
| Max APR | 28% | 28% |
| Max borrowing amount | $1,000 | $2,000 |
| Max loan term | 6 months | 12 months |
Cash advance apps
Cash advance apps let you access a portion of your paycheck before payday, often without a credit check. While fees are usually small, relying on advances repeatedly can create a cycle where each paycheck feels short. These tools can help in emergencies but aren’t a long-term solution.
Review the best cash advance apps.
Borrow from friends or family
A loan from a trusted friend or family member can be one of the cheapest ways to cover urgent expenses. If you go this route, treat it like a formal loan: Agree on repayment terms upfront, and prioritize paying it back to protect the relationship.
Credit cards (especially 0% intro APR)
If you qualify for a credit card with a 0% introductory APR, you may be able to borrow interest-free for six to 12 months. This can be a strong alternative to a personal loan — as long as you pay off the balance before the promotional period ends. Otherwise, high interest rates can quickly increase your debt.
Payment plans
Before you borrow, consider asking the provider directly. Hospitals, medical offices, veterinarians, and even the IRS often offer structured payment plans, sometimes with no interest. These arrangements can be far safer than taking on new high-interest debt.
Buy now, pay later (BNPL)
Buy now, pay later programs split purchases into smaller installments, often with no short-term interest. While convenient, they can encourage overspending and may charge interest on longer repayment plans. Always use BNPL cautiously, especially if you’re already struggling with debt.
Recap of credit score requirements for personal loans
Article sources
At LendEDU, our writers and editors rely on primary sources, such as government data and websites, industry reports and whitepapers, and interviews with experts and company representatives. We also reference reputable company websites and research from established publishers. This approach allows us to produce content that is accurate, unbiased, and supported by reliable evidence. Read more about our editorial standards.
- CFPB, What Is a Payday Loan?
- FICO, What Is a Credit Score?
- In Charge Debt Solutions, How to Get a Debt Consolidation Loan With a High Debt-to-Income Ratio
- MyCreditUnion.gov, Payday Alternative Loans
- NCUA, Payday Alternative Loan Rule Will Create More Alternatives for Borrowers
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About our contributors
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Written by Timothy Moore, CFEI®Timothy Moore is a Certified Financial Education Instructor (CFEI®) specializing in bank accounts, student loans, taxes, and insurance. His passion is helping readers navigate life on a tight budget.
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Edited by Kristen Barrett, MATKristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, with her wife and their three senior rescue dogs. She has edited and written personal finance content since 2015.
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Reviewed by Kyle Ryan, CFP®Kyle Ryan, CFP®, ChFC®, is a co-owner and financial planner at Menninger & Associates Financial Planning. He provides his clients with financial products and services, always with his clients' individual needs foremost in his mind.